Government Grants

$1 Trillion in Federal Grants Under New Rules: What Applicants Need to Know

The U.S. federal government distributes over $1 trillion annually in grants to local governments, nonprofits, small businesses, researchers, and individuals. As of May–June 2026, the Office of Management and Budget (OMB) has proposed the largest overhaul of federal grant rules since 2013. Every applicant must understand the new compliance standards before submitting an application.

What Changed: The 2026 OMB Proposed Rule

On May 29, 2026, the OMB published a proposed rule in the Federal Register rewriting 2 Code of Federal Regulations (CFR) Part 200, commonly known as Uniform Guidance. This is the largest revision to Uniform Guidance since its initial publication in 2013.

The 412-page proposal could be the biggest overhaul of how the federal government distributes financial assistance in decades. Federal agencies distribute more than $1 trillion a year in research grants, support for local governments and small businesses, and farm subsidies.

Key changes introduced:

New national policy requirements implementing executive orders related to DEI and other issues
Political appointees now have final sign-off authority over federal funding, with performance closely monitored, including through the Treasury Department’s Do Not Pay registry
Expanded authority for federal agencies to terminate awards, with categorical exceptions for block grants, formula grants, and disaster recovery grants
New pre-award review requirements and new viewpoint-neutrality requirements for event services on property under public entity control, National Association of Counties.

Who Is Eligible for Federal Grants?

Eligibility varies by program, but the following categories are broadly covered under Uniform Guidance:

State and local governments (including counties and municipalities)
Nonprofits and NGOs
Small businesses (under select agency programs)
Higher education institutions
Individuals (through specific programs like Pell Grants)

New in 2026: Stricter restrictions now apply to who grant programs can serve, greater vulnerability exists to investigations under the False Claims Act, and DEI initiatives are now classified as “illegal” under current administration policy.

Major Active Programs (FY 2026)

Program	Agency	Funding Level
BEAD Broadband Program	Dept. of Commerce / NTIA	$42 billion+
INFRA Transportation Grants	Dept. of Transportation	Multi-billion (NOFO pending)
Workforce Pell Grant	Dept. of Education	Nationwide (effective July 1, 2026)

Beginning July 1, 2026, students can receive Pell Grants for enrollment in high-quality, short-term educational programs that prepare them for high-skill, in-demand jobs, helping more Americans enter the workforce rapidly with little to no student debt.

How to Apply: Step-by-Step

Find your opportunity — Search Grants.gov for current Notices of Funding Opportunity (NOFOs)
Confirm eligibility — Review the specific NOFO eligibility section carefully under the new 2026 standards
Register your organization — Active SAM.gov registration is mandatory for all federal applicants
Prepare compliance documents — Include indirect cost rates, subrecipient monitoring plans, and policy certifications
Submit before the deadline — Application windows historically close within 90 days of NOFO publication
Monitor award conditions — New awards carry materially different compliance commitments than grants issued before 2025

Common Rejection Reasons in 2026

Incomplete SAM.gov registration
Missing or incorrect indirect cost rate documentation
Non-compliance with the new executive order policy certifications
Inadequate subrecipient monitoring documentation
Failure to address updated eligibility restrictions

Grantees that understand the new rules and demonstrate that understanding in their applications, with accurate budgets, credible indirect cost proposals, and documented subrecipient management systems, are better positioned in review processes.

Key Deadline

Public comments on the proposed OMB rule changes are due July 13, 2026. Organizations are encouraged to review the proposed rule and submit comments via docket OMB-2026-0034.

Frequently Asked Questions

What is Uniform Guidance (2 CFR Part 200)?

It is the federal regulation governing how all grant funds are applied for, awarded, administered, monitored, and audited across every federal agency. The 2026 proposed revision is the largest update in over a decade. Read the full text at ecfr.gov.

Who oversees federal grant approvals now?

Under the 2025 to 2026 rules, senior political appointees have final review authority over discretionary awards to ensure alignment with current administration priorities. See OMB guidance at whitehouse.gov.

Where do I apply for federal grants?

All federal grant opportunities are listed at Grants.gov. SAM.gov registration is required before applying.

Why might my grant get terminated?

New rules expand agency authority to terminate awards for non-compliance with national policy requirements, including DEI-related conditions and performance benchmarks. Review termination provisions at regulations.gov.